Beneficial Ownership Register to be introduced for Hong Kong companies

As a member country of the Financial Action Task Force (FATF), the international standard setter on anti-money laundering and counter-terrorist financing, Hong Kong is planning to implement a statutory requirement for companies to maintain up-to-date beneficial owner, or in regulatory terms ‘People with Significant Control’, information in accordance with FATF recommendations.

This move comes in light of the 2018 FATF compliance review of Hong Kong. The Financial Services and Treasury Bureau (FSTB) has issued a public consultation paper ahead of the bureau’s plan to introduce a bill to amend the Companies Ordinance into the Legislative Council in the second quarter.

What is a beneficial owner?

The consultation proposes a redefinition of a beneficial owner in line with the current FATF terms. A beneficial owner is an individual who-

  1. Directly or indirectly holds more than 25% of the shares or voting rights of an entity;
  2. Directly or indirectly holds the right to appoint or remove a majority of the directors of the board;
  3. Otherwise has the right to exercise, or actually exercises, significant influence or control; or
  4. Has the right to exercise, or actually exercises, significant influence or control over the activities of a trust or a firm that is not a legal person, but whose trustees or members satisfy any of the former conditions (in their capacity as such) in relation to the company, or would do so if they were individuals.

The register of beneficial owners / people with significant control would therefore look through successive layers of companies and make the identity of the beneficiary available for public inspection. The company will be required to keep the register at a specified place in Hong Kong and appoint a Hong Kong resident person or company service provider as the named responsible person and contact point for the cooperation with law enforcement on information requests. The existing sanctions and penalties for non-compliance are likely to be extend to the keeping of the register of persons with significant control as well.

Compliance made easy

In order to ensure your company’s statutory records are compliant with existing and future laws and regulations, contact Encore Professional Services Ltd at Our holistic corporate services will help you to continue to focus on your core business rather than compliance risk.

Encore Professional Services Ltd assists start-ups and SMEs with their needs to establish a corporate presence in Hong Kong and supports business growth by providing outsourcing solutions for accounting, payroll administration and IT services.